Could Legal California Pot Send Canadian Profits Up in Smoke?

By
Douglas Quan, Postmedia News
on August 6, 2010

Small marijuana plants, available for sale, are shown in a medical marijuana dispensary in Oakland, California June 30, 2010. (Photo by Robert Galbraith, Reuters)A looming referendum in California on whether to legalize marijuana has fuelled a debate among bloggers and pundits over this question: Could legalization in the United States cripple the Canadian economy?

In a column on the Guardian’s website this week, B.C. writer Douglas Haddow writes that a move to legalization would be “devastating to the Canadian economy, halting the flow of billions of dollars from the U.S. into Canada.”

B.C. marijuana activist Marc Emery — the self-styled “Prince of Pot” who is awaiting sentencing in the U.S. for distributing cannabis seeds — recently told a Vancouver indie website that “the homegrown market will evaporate.”

Are they just blowing smoke? Not necessarily, some academics say.

Marijuana production generates at least $3 to $4 billion in B.C. alone — due, in large part, to heavy demand from pot heads south of the border, said Darryl Plecas a criminology professor at the University of the Fraser Valley in Abbotsford, B.C.

Plecas said he estimates that about 70 per cent of all marijuana produced in B.C. is sent to the U.S. and much of it goes to California.

“(Producers) are probably frantically looking where they can ship it to” besides California, he said.

Eugene Oscapella, a criminology lecturer at the University of Ottawa and founding member of the Canadian Foundation for Drug Policy, said there is no doubt that if California legalizes marijuana, producers there will be able to sell the product more cheaply — thus making it difficult for producers here to compete and driving some out of business.

“Increased availability for a lesser price in that country will have an effect on suppliers in Canada,” he said.

Of particular concern, he said, are the mom-and-pop producers in rural parts of B.C. who turned to marijuana as a way to make ends meet after the forest industry declined.

Other observers, however, are more circumspect about how crippling legalization would be for Canadian producers, pointing out that “B.C. Bud” still enjoys a reputation in many circles as “the Rolls-Royce” of marijuana and that there are many other U.S. states — besides California — that covet Canadian-grown marijuana.

Also, Mexico, which exports far more pot to California than Canada, would probably be stung a lot harder, they say.

Even as the Canadian dollar has appreciated — making Canadian-grown marijuana much more expensive for Americans to buy — the industry has continued to thrive, said Stephen Easton, a professor of economics at Simon Fraser University in B.C. and a senior fellow at the Fraser Institute.

“It’s a very resilient industry and very adaptive,” he said.

Chuck Doucette, a retired RCMP staff sergeant who specialized in drug enforcement, adds the black-market exchange of Canadian marijuana for U.S. cash and cocaine is so “thoroughly entrenched” that it is unlikely that those lines will disappear overnight.

The California marijuana initiative is headed to a vote in November. Even if it passes, it is likely that it will go through a series of court challenges, experts say.

An Angus Reid poll earlier this year showed that 53 per cent of Canadians favour legalizing marijuana — regulating and taxing it like alcohol and tobacco.

Supporters say they hope passage of the initiative in California will create a domino effect that leads to more lax pot laws in other parts of the U.S. and in Canada.

In addition to raising huge amounts of tax revenue, legalization would severely undercut organized crime groups and free up police resources to tackle more serious crimes, they say.

Marijuana and cocaine are consistently reported to be the illicit drugs most frequently trafficked by organized crime groups, according to annual RCMP reports assessing the drug situation in Canada.

But opponents of legalization say widespread use of marijuana could lead to use of more dangerous drugs, worsen addiction problems and send mixed messages to young people about drug use.

Prime Minister Stephen Harper’s Conservative government has repeatedly said it has no intention of decriminalizing or legalizing marijuana.

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Comments

15 Comments

THE INDIVIDUALS on
August 11, 2010 3:49 am

It will hurt the tourist who were coming to Smoke Weed in Canada. Most People are going to choose the beaches in California over Canada. But that was the whole plan. They want to start keeping all of the money in house. Times are hard.

Anonymous on
August 10, 2010 3:48 pm

The reason California and Columbia are so close to each other.

Is that’s were America gets all that (Slap Myself) and where did I go?
That stuff what turned alot of great men into bums.

How did I get here? Is what the world askes itself everyday.

And if you weren’t a cartoon you’ll wonder, is this all real?

Anonymous on
August 9, 2010 6:40 am

the last thing Cali needs now or ever is BC Bud!!! BC Bud became famous in the Bible Belt of America, where “dirt Weed” is the norm. But out west BC Bud is but a joke amongst growers,end users alike! Not trying to rag on your national product

Anonymous on
August 9, 2010 12:24 am

I don’t think this is true in the least. I live in California and I’ve never come across herb grown in Canada. Whatever I or my friends find is from a dispensary or is grown outdoor in Norcal.

KevinN on
August 7, 2010 11:47 pm

So?

I hear a lot of revenue numbers, but where are the receipts? Regardless, big deal.

Even IF there is a hint of truth to this, decriminalization/legalization will completely change the commerce of cannabis.

Some will lose … yes.

But ultimately, society will win.

Now let’s please get on with this.

Uncle Bob on
August 7, 2010 10:33 pm

The Feds won’t miss you…we will… stay and fight the oppressors.

Anonymous on
August 7, 2010 5:05 pm

Canada can keep there beasters! I dont think it will have much effect on BCs economy because California is smoking Cali buds not bc buds. Most bc buds go to the interior states and midwest. We don’t need any canadian chemical hydro crap we got the organic outdoor humboldt/mendo! BC keeps there good buds for themselves much like in Cali. The shitty hydro and outdoor gets shipped out of state while we keep the good smoke for ourselves XD

Anonymous on
August 7, 2010 6:01 am

EVERYONE WILL GROW AS MUCH AS POSSIBLE!!!!!!

Swollen_Goat on
August 7, 2010 4:28 am

If Proposition 19 passes,I’m moving to California! At least until the squares in Ottawa catch-up and end this nightmare war on Cannabis.

persecutedinalberni on
August 7, 2010 3:45 am

I agree Jeremiah we will have to compete,I spent my life yakin how much freer my country is than theres and have allways said it must be us that shows them we are freer and we will legalize and realize how much we have lost by not legalizing sooner.

We must show them we will spread the seed of cannabis freely to show them that we fought evil to win the right to use cannabis for all it’s worth.

I have been told since I was in my teens that I am a criminal because America says I am if I grow, smoke weed and that it prohibits us from doing so because this evil force says it is bad.

So if America legalizes it to the point where the weed I am now buying is very cheap then I will grow it on my own and I will fight to the death anyone who tells me I cannot on my own property.

That will be the fuckin day it is legal in the same evil country that has told me I am bad if I use it but yet they turn around and do it lol I don’t think so LMFAO.

Anonymous on
August 7, 2010 3:06 am

i’m having a hard time beleaving these “facts”, does california not grow pot? can only canada and mexico grow pot? fuck no, you can grow weed in your fuckin closet, anyone with the ambition to abtain the proper knowledge and to put that into practice can manufacture weed

Erik on
August 7, 2010 2:29 am

domino effect is right.If U.S starts legalizing then Canada has a much better chance at legalizing .Oregon is half way there .Its inevitable why fight it.Join the movement

Seeds to America?considering you get 100s of seeds in a pollinated bud seems like a rip .If they really cared about America they would charge $3 or less .

Time is coming …Change is smoke.

jeremiah on
August 7, 2010 12:46 am

“Supporters say they hope passage of the initiative in California will create a domino effect that leads to more lax pot laws in other parts of the U.S. and in Canada.”

This is what I want to happen. BC will have to legalize to compete!

Anonymous on
August 7, 2010 12:14 am

These fears are not unusual but they are unwarrented. It is the fear of change. Humans are creatures of habit and change worries them

Things will be different, and players will have to change and adapt, but the sky will not fall for anyone.

The reality is that there is more opportunity to make money in a legal enviornment than in a prohibitive one.

Mrs. Rat'sRectum on
August 6, 2010 11:57 pm

Collect your data. I’m thinking there would be no significant, no adverse effect if California legalized. However, if Washington and/or Oregon did also there would be a significant impact. Still, a lot of people from the surrounding states would travel to California like on vacation or day trips. There will be a limit to how much they can buy, to take back with them, so the existing channels would still be there, shortest and/or easiest.